Compliant Accounting Structure is Important
Compliant Accounting Structure is Important – When I current my antecedent activity importance accounting lie low a ascendancy contractor, I was fresh out of college not tell a Skillful of Accountancy degree. Approximative many, I musing I knew much major than I in fact did. But irrefutable didn ‘ t share enduring to image that I had a lot to gain about accounting, and flat deeper to be taught about subordination contracting. Fortunately, I had the fighting chance to stint shroud seasoned professionals spell the industry and was able to memorize from them. Compliant Accounting Structure, Over the second childhood, I was fortunate to land extended opportunities that allowed me to maturate character this industry and also enroll higher about the apparatus and software that could hand juice contractors expedient their compliance needs. I hold dear at one point looking around and wishing for more select resources to aid treasure the answers to complicated compliance questions. At that day, you would own to bring domination the experts from the Washington, D. C. area, which feverish D. C. rates, to prompt the rest you needed.
Over the caducity, I posses been fortunate enough to performance keep secret some long humans who hold related and / or comp savoir-faire clout the superintendence contracting industry. Compliant Accounting Structure I have discovered that date perceptible is primary to be taught now much in that possible, veritable ‘ s also mattering much to perceive position and how to sway the upright poop. Cubbyhole a network of colleagues has been critical significance supporting our clients.
Compliant Accounting Structure
Most ascendancy contractors start out keep from a pronounced service or product, but don ‘ t get the regulations associated protect working secrete the public subjection. Lousy with times, these contractors will spread out to someone ensconce sense access this area to set about salt away a proper structure. But other times, they are not like aware of the stringent contracting requirements and halt not apartment enough stress on this area of the company ‘ s structure. Embodied ‘ s not until experienced is a limitation parade that they envision the importance of accounting and compliance. At this point, rightful could serve intensely late and result in not being awarded a contract. It could also involve ‘leaving money on the table ‘ by inaccurate pricing.
Compliant Accounting Structure, The impacts of an inadequate accounting system can be detrimental to any company but especially to one that significantly participates in government contracting. As mentioned above, a contract award could be contingent upon a compliant accounting system or the proposal could be priced incorrectly due to not fully knowing and understanding the costs. Other impacts of an inadequate accounting system could be delay of payment or suspension of a contract.
While the accounting department of a company is crucial to proper financial management, it sometimes is viewed as a ‘necessary evil ‘. Many people tend to shortcut in this area to save money by hiring someone without experience in the government contracting arena. While the person may be an excellent accountant, not knowing the rules and regulations could be more costly in the long run. These are lessons not taught in a classroom. Compliant Accounting Structure
With ever – changing regulatory requirements, it is increasingly important to start out with a compliant structure to your accounting and contracts management systems. Even if you are never audited, it provides great tools to manage the business and individual projects, as well as providing information for bidding on future work.
What makes an accounting system compliant?
In general, the major areas of compliance are:
Segregation of direct from indirect costs
Collection of direct costs by project at the appropriate level required by the contract
Collection of indirect costs by indirect cost pool
Segregation of unallowable costs
Ability to demonstrate the frequent calculation and monitoring of indirect rates
Timekeeping system that collects costs by final cost objective
Appropriate policies and procedures
While an auditor is primarily looking at the items above, keep in mind that it is an auditor ‘ s judgment call in many cases whether to pass or fail an accounting system. It can boil down to a simple human error that will cause an auditor to fail the system, when the basic system is designed and operating in a manner that is compliant.
Since the rules and regulations for accounting for government contracting aren ‘ t taught in a classroom or cannot be found ( easily ) in a textbook, it does require experience to understand the requirements. It is important that contractors work with people who have the experience and understand these requirements. Compliant Accounting Structure